Founded After Forty by Glenda Shawley

Author:Glenda Shawley [Glenda Shawley]
Language: eng
Format: epub

Skimming pricing

This strategy is best suited to innovative products or the first to the market. Early adopters will usually be willing to pay a premium price to be amongst the first to own the latest innovation. The strategy also works for seasonal products that come to market ahead of competitors, things like new potatoes or home-grown strawberries. Skimming means charging a higher price for a limited period whilst a product is new or only available in limited quantities. Once the product becomes freely available or mainstream the price drops. This strategy can work for small businesses if you can get your product to the market early. Whether this is a temporary or permanent strategy will depend upon what you sell. In the horticultural industry for example you may base your whole business on selling early season, or difficult to obtain out of season, produce that you sell at a premium price. However, if your business is based on being first to market with an innovation you will need to choose an alternative pricing strategy when your product becomes more mainstream.

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